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Have I mentioned my new book? (It’s the vain author’s constant refrain.)

Yes, I know I have. But that was pre-publication. Now I have an actual copy in my hands, so that means that the orders have started shipping from Policy Press.

This is a book for practical people. It’s about how high-value philanthropy is evolving across Europe, so practical people in fundraising, in prospect research, in social investment, in policy making and in education will all find – I hope – useful information here.

If you are a major donor fundraiser interested in why your donors keep asking about impact, you’ll find an answer here.

If you are a private banker or wealth adviser who wants to understand why your clients keep on asking about foundations in France, you’ll find out why, here.

If you are a policy maker wondering whether to recommend further tax relief for donations, then you’ll find the arguments here.

If you are a prospect researcher, wondering where to look for potential supporters in Switzerland, you’ll find some answers here.

And if you are the director of an NGO, wondering what your strategic priorities should be, you’ll find some suggestions here.

The book includes case studies, detailed research, some how-to, and a bibliography of more than 300 sources and references in (count ’em, ladies and gentlemen) seven languages. Its focus is Europe, meaning that this is not about the UK + the Continent + Ireland – it’s about the Continent + Ireland, plus the UK.

There has been some interest online over the past few months in how prospect researchers can make the best use of ‘donation data’ – i.e. databases, reports and websites that list donations, showing who gave, how much, and to whom.

Recent blogs such as this one from iWave inspired us to carry out a survey amongst our subscribers to Factary Phi to find out for ourselves how and why they are using donation data. Some of their answers were unexpected – we found out that our subscribers are very imaginative when it comes to making use of data on donations in their research. Below we have outlined some of the ways our subscribers have told us they’re making use of the data.

If you use donation data in your research, we hope the innovative approaches of our subscribers prove inspirational to you!

The five ways our subscribers are using Phi data

To understand philanthropic interests to help identify the best prospects

Overall (and perhaps the least surprising in many ways) was that a whopping 90% of respondents to our survey mentioned that the two ways they mainly use the donation data in Phi were to:

Research existing prospects, e.g.:

“Searching by name and checking which causes [prospects] are giving to, to determine philanthropic interests”

“Get a sense of causes these donors or prospects support”

“Research other charities supported by existing supporters and prospects”

“Check who is giving to similar causes [and] check who is giving to particular causes”

As we know, using research on donation history to find prospects with an affinity to a particular cause has been long proven as an effective strategy for understanding which of your current prospects might prove to be the most likely to donate – and also for finding new potential likely donors. This is because many donors will have a specific interest in a particular cause and will more readily consider donating to organisations operating in a similar field in the future (Breeze & Lloyd, 2013). This type of approach to the research was said to be useful for researching all types of prospects on Phi, including individuals, trusts and companies.

To help researchers shape fundraising strategy

Interestingly, prospect researchers using Phi told us that researching donation data can be a way that they can help their organisations to plan fundraising strategy. Subscribers noted that the breadth of data on Phi allowed them, together with additional research, to benchmark types of donors to similar organisations or projects, thereby gaining an understanding of the current fundraising market. So, for example, the research might show if individual major donors would be more or less likely to support a particular type of project or campaign than trusts & foundations. Armed with this knowledge, researchers can then advise senior management on the likely avenues for support, thereby shaping the fundraising strategy around the type of donor most likely to give.

The ability for researchers to ascertain potential levels of giving was another factor mentioned in helping to shape strategy – by using Phi to research donation levels, researchers are able to estimate the potential eventual Ask for current donors and existing / potential prospects. Knowing a prospect’s previous donation levels to different causes is a useful way to gauge their likely or potential future donation to your cause – and arguably more accurate than basing their estimated gift capacity on wealth data alone. This donation information enables researchers to contribute to discussions around fundraising targets for campaigns and projects, potentially putting them in a central role during decision-making around prospect allocation and fundraising strategy development.

Also, some researchers stated that the data on Phi also helps them identify local recipient organisations (by searching for donations to a particular region or town) to see if there are common funders or funding networks prevalent in that local area, thereby contributing to an understanding of the potential local prospect pool or philanthropic networks to be cultivated. This approach was said to help both national charities with local offices and also regional organisations (such as hospices).

To encourage stronger relationships between fundraisers and researchers

We thought this was a particularly nice benefit to researching donation data!

Some of our respondents reported that fundraisers were more willing to take on prospects that a prospect researcher had identified if they could provide information to the fundraiser on the prospects’ previous donations. When these prospects turned out to be decent (and ultimately donated to the cause), the fundraisers were then more open to working with the researcher’s suggestions in the future, thereby creating a better working relationship.

Respondents also noted that even where information on specific gift amounts was omitted from the donation search, simply identifying that the prospect is philanthropic was sometimes enough to encourage fundraisers to act on their suggestions.

To understand how donors give

Turns out, knowing how donors give is almost as important to researchers as knowing how much they give.

Subscribers reported that having donation data which covers a broad range of types of giving is incredibly useful. Being able to see prospects giving via their charitable trust, their company and as an individual gives a quick overview of the prospects’ philanthropic portfolio. Using this information, researchers can then advise on approach strategies – e.g. whether to approach a prospect as an individual major donor or via their charitable trust for a specific project.

Breeze & Lloyd (2013) reported that whilst 73% of rich donors give via their charitable trust, 49% also give one off donations, 28% give via standing order/direct debit and 22% are planning to give via their will. This breadth of giving is reflected in Phi, with donations showing donors giving via multiple channels, making the data useful for trust fundraisers, corporate fundraisers and major donor or individual giving teams. Being able to contribute to so many areas of fundraising can make a prospect researcher an invaluable and valued part of the wider team.

One subscriber also mentioned that the inclusion of political donations on Phi was especially useful as, because they were new to prospect research when they first started using Phi, they wouldn’t have thought of political donations as a source for prospect information. Also, US research in 2015 by DonorSearch reported that individuals who gave >$2.5k in political donations were 15 times more likely to give to a charitable organisation than those who hadn’t (whether this is also true of political donors in the UK is unclear, however).

To improve the perception of researchers in their own organisations

Perhaps our favourite benefit of all!

As stated above, relationships with fundraisers have been known to improve through using donation data as a research tool, but subscribers further noted ways in which making use of donation data in different ways can highlight the enormous contribution prospect research makes to a team. Some examples are:

Prospect researchers use the data to increase their knowledge of the prospect pool and to prioritise long lists of prospects by previous giving – this is invaluable information when discussing cultivation strategies and allocating prospects to fundraisers.

Data on giving history enables researchers to boost numbers of new prospects, which can bring research into a more central role when moving through a campaign, for example.

Research into philanthropic interests had highlighted where prospects had made large gifts to other organisations that had strong links to their own Trustees or Chairman. Noting these links and connections was hugely important in devising an approach strategy for the prospect and wouldn’t have happened about without the research into philanthropic affiliations and donation history.

One more thing…

Perhaps the best outcome of all, for everyone involved, is to know that some of our subscribers have stated that research into prospects’ donation history ultimately helps lead to new gifts for their organisations. Which is, after all, what it’s all about!

We hope this proves useful for you in your own research.

And, finally…thanks to all of the subscribers to Factary Phi who took part in our survey!

The new NTU Archive is many things. It’s a simple, fast and efficient way to find trusts and foundations in the UK. It’s a great way of finding out about philanthropists, and it is a history of the last ten years of philanthropy in the UK.

Factary began recording the new wave of philanthropy back in 1993, when we noticed that the Charity Commission for England and Wales was experiencing a boom in trust registrations. We discovered that the registration documents for charities – which are in the public domain – contained information that allowed fundraisers to get a clearer idea of what the activities of new trusts, and who was behind them. This was not, at the start, an easy process. We had to take the train to Taunton (where the Charity Commission keeps part of its archive) and request, one by one, the registration documents for these new charities. We then had to go through each document by hand to pick out the charities that looked like they might be, or might become, grant-makers, and start the process of research.

The second part of this process has not varied much over the years – we still carry out detailed research on each trust, contacting trust administrators and aiming to establish who is behind the trust, what their interests are, and what they hope to do.

The Factary team moves fast on that research, and subscribers to New Trust Update (we limit the number of subscribers to 100) rely on us to be the first to hear about new grant-makers.

The result is a rich database of more than 2,500 trusts with interests in arts, rights, women, older people, animals, the environment… the whole range of charitable activity. Users of the NTU Archive can search the entire data set using combinations of codes (for example, ‘Education and Training’) and keywords, to find trusts that were created with those interests.

Users can research trustees by name. There are more than 9,000 trustees listed here, so this is a rich database on individual philanthropy – people who are concerned enough about a social or environmental issues to create a foundation or to join the board of a new foundation. Information on philanthropy in the UK – with the honourable exception of Factary Phi – is hard to find and this data, linking people to their philanthropic interests is invaluable to the non-profit sector.

Factary’s Will Whitefield emphasises that this is a record of the moment that the trust was created. ‘It’s like a birth photo of the trust. When we research the trust it is around a month or two old; so the trustees, objectives and finances are from those early days.’ But that in itself is valuable, because it allows a researcher to see who the baby was, and how it grew up.

There are plenty of examples of this. The Bernard Sunley Charitable Foundation that we reported in June 2005 topped £4m in income in March 2015, double its spend at start-up. The Schroder Foundation, reported by us in March 2005 and created with a £10 deposit, had grown to £2.2m by April 2015 – that’s 22 million percent growth if you do the maths.

But tracking less spectacular growth is also relevant. For example, a search using the keyword Africa throws up 167 trusts. Pick an early one, such as the Egmont Trust and compare it with the Charity Commission’s current record for the foundation you can see that founding trustees Clare Evans (who had worked with ActionAid in the 1990s) and Jeremy Evans are still in place, but that three others have joined (and two left) over the ten years since we reported its registration in our April 2005 edition.

In here you will find the origins of venture philanthropy and impact investment. The Private Equity Foundation – we reported on it in November 2006 – is in there as is the moment in 2013 when it merged with Impetus to form Impetus Private Equity Foundation. The Apax Foundation – we reported its registration in March 2006 – is there too.

Finally, there is all the great inventiveness of philanthropy here. There are foundations with names based on Beatles’ lyrics (“Love Is All We Need”, registered and reported in 2007), those with hopeful names (“The Making a Difference Foundation,” “Heaven Can Wait” or “The GoodFund”) and foundations from the UK’s vast pool of celebrities, from Gordan Ramsay, chef to the late Dan Maskell, tennis champion.

There is a kitchen theme in this year’s Foundations of Wealth, published today, with Gordon Ramsay featured alongside the owner of the UK’s largest franchise for Domino’s Pizzas, and a kitchenware manufacturer.

They are three amongst 42 wealthy philanthropists who have set up a grant-making trust during 2014, all of them profiled in depth in our freshly-prepared report.

New trusts appear to be boys’ toys. 93% of the wealthy founders whom we profile are men, with just 7% women. That is the same ratio as in 2013, and slightly more male than in 2012. It reflects the gender imbalance in great wealth in the UK with around 10% of the Sunday Times Rich List being women, and a hard-to-explain gender imbalance in structured philanthropy. As “Untapped Potential” reported in 2011, just 4.8% of European foundation grant monies go to women and girls (see Shah, Seema, Lawrence T McGill, and Karen Weisblatt. Untapped Potential: European Foundation Funding for Women and Girls. New York: Foundation Center, 2011.) Factary is currently engaged in a study of philanthropy amongst women of wealth to try to find out why.

As in previous reports, the founders of UK grant-making trusts are economically active – more than two thirds (69%) are under 65 – a similar percentage to 2013 and a slightly younger profile than 2012, when 53% were under 65.

Their’s is new money – more than three quarters are self-made millionaires – with wealth principally from financial services, retail, manufacture and property. The total wealth represented by the 42 we have profiled in depth is over £6.8 billion – reflecting the increasing concentration of wealth in the UK.

The founders are distinctly international, with four people of Indian descent and three others with non-UK nationality, as well as founders who have lived and worked abroad. The UK is not the easiest country in the world in which to create a charitable foundation (it is arguably easier in the Netherlands, for example) but the combination of a wealth management industry that is growing and gearing up for philanthropy, a broadly stable economic climate and people – philanthropists – who want to make their giving more effective has led to a boom in the establishment of trusts. Last year we reported on 214 newly created grant-making trusts in our monthly New Trust Update report.

Could you build a partnership with these new trusts and foundations? Our report tells you about the founding philanthropists, about their philanthropy they set up their foundation, and about the new foundation’s interests. Health, welfare, education and training are the big subjects, and we’ve identified clusters of interests linking health and arts, education and welfare. We have researched an in-depth profile of each of these leading philanthropists, and here you will find biographic information that will help you build a link with the trust, or the founder.

Philanthropy is alive and well in the UK amongst people of wealth. These good 42 at least are willing to share their wealth with the rest of society.

The Prospect Value Chain

The standard view of prospect management in major donor or “strategic donor” programmes is that it’s a chain, or a cycle. First we identify a person, or a foundation or company, then we research them a bit, then we meet them, then research them some more, then decide (“qualify”) if they are worth developing as a prospect, and then cultivate them, ask them and steward the donation that they make.

At Factary we talk about a Prospect Value Chain, with a series of steps (Suspect, Prospect, Qualified, In Cultivation…) along which the prospect moves. Each step adds value to the prospect, and each implies a corresponding increase in investment in the prospect, an investment principally made in staff and volunteer time (hence the Prospect “Value Chain”).

Not Real Life

It’s a neat idea. But it looks increasingly unlike real life. As an example: many donors arrive with their first gift already in hand. At one leading nonprofit with which we work, the major donor team gets notified when someone makes a gift of €500 or more. These donors did not pass through the Suspect – Prospect – Qualify stages. Last week at a research organisation client I heard that a Government donor had met a scientist out in the field and had decided there, on the spot in Africa that, yes, they liked his research and would fund his project. That donor does not appear to have been qualified and cultivated. At a university recently the Development team told me how their major donor fundraiser had headed off from a cultivation meeting directly to a new prospect whose name and number had been mentioned at the meeting. Again, no qualification by the research team. And I heard about someone who was well-known to one part of the University but who was new for Development – she was ready give without being cultivated.

You will argue, technically, that yes, of course she had been cultivated. Just that the cultivation took place outside the Development department. In fact these examples can all be made to fit the classic Prospect Value Chain approach. It’s just that they don’t fit very well. It is time for a rethink.

If it works, don’t fix it?

The Prospect Value Chain has worked well for a number of reasons. It’s a process with milestones, and that’s attractive to managers. Being able to state definitely that Jane is an Unqualified Prospect while Abdul is “In Cultivation” means that we can count the Janes and Abduls. Each has a flag or position in the Prospect Value Chain.

But unless Abdul is a first time donor, or you are running a very simple fundraising campaign, he’s likely to be in many positions on the Prospect Value Chain at once; he might be a donor to an Annual programme (and thus in Stewardship), a Prospect for a Scholarship appeal, In Cultivation for a Capital campaign, on the board of a foundation that is a Qualified Prospect for your science appeal…

Where you have multiple fundraising products, or when you are beyond your very first major appeal, you are likely to face this tricky multiple-positions issue. This is a linear model in a network world.

It helps that the Prospect Value Chain puts labels on relationships. Many of our Customer Relationship Management programmes use these labels. The label ‘In Cultivation’ means, in practice something like:

“Well, Marty met her a couple of weeks ago and had, you know, one of thoseconversations. She told him all about her son’s application to the Uni and, although Marty told her he couldn’t help she seems to think he can. She tried the same thing at the dinner with the Vice Chancellor last week and, frankly we’re getting a bit tired of her…”

Categorising this prospect as ‘In Cultivation’ is a useful shorthand, but are we losing granularity?

Dimensions, the new Universe

And then there is the problem of squeezing prospects into one dimension. Here is the issue: we know that over the period of a cultivation various changes take place. A donor who barely knows us becomes a friend, or at least a professional acquaintance. She meets, makes contact with, other people in our organisation. This is the Connection Dimension. At the start of the process she had some perhaps only partly formed ideas about helping people from the poor neighbourhood where she grew up. By the end of cultivation she has a precise idea of exactly what she wants to do and how she is going to measure its impact in her birth community. Her motivations have shifted, or evolved or clarified. This is the Motivation Dimension. Back at the start she had a series of concerns about the college’s management and its finances, and was in fact talking to two other nonprofits. This is the Objection Dimension. And there are dimensions for Trust, for feeling part of a process (the ‘Participation Dimension‘), for cash and gift values…

Now try to fit that model to the classic, linear, one-dimensional Prospect Value Chain. Or boil all of that down to the one word “Propensity” [to give].

Just to complicate life a bit further, each nonprofit will have its own specific Dimensions: if yours is a faith-based nonprofit you might have a religious Dimension, for example. If you campaign you’ll have a political one.

People move across these Dimensions all at once.

A map would show the collected multi-dimension as a brane, with Dimensions curving across space and time, and touching at many points. These touch points are where a prospect’s Dimensions influence each other: last week one of your prospects met your leading research scientist. As a direct result she is much more motivated to support you, and feels a stronger connection; she and the scientist got on well. Her Connection Dimension touched her Motivation Dimension and both grew. Another prospect, who had quite a few concerns about your organisation, went to a meeting and learned that one of her barrier issues was resolved – in other words the Participation Dimension touched the Objection Dimension and both have shifted; she’s participating more and objecting less.

I get the cosmic idea, Chris. But how we could use this stuff in real life, back here on earth?

OK, let’s start with scores. Many organisations use scores to help them sift out the best prospects from a large pool. For example, we use a simple 1-3 scoring scheme for motivation. Jane, who is very keen on our cause, gets 3, while Pete, who couldn’t care less, gets 1. We score in the moment, and we don’t keep historic scores.

If we had kept a history of Jane’s scores we would have noticed that her interest in us tails off when the gap between meetings with her gets longer than six months. Her connection to us weakens and her motivation falls. With another more demanding donor we see the same effect after only four weeks of no contact. Back with Jane, we have identified that there is a problem with trust – she’s not making the big donation and a mutual friend has mentioned that it’s because she does not fully trust us to deliver. Looking back at her history of scores we can see that her trust score blipped positively when she took part in a planning group for the new laboratories. Participation built trust. So we plan a series of participations and consultations for her to restore trust.

You are thinking (I can see the thought bubble) “…this is just common sense. It’s what we do with prospects and donors every day!”

And that’s my point. Yes, this is what you do every day. But it is not what your CRM database is showing you. That is still showing this stuff as though it were one-dimensional. And if you use a scoring scheme like the one I have described, your wonderful CRM system is probably only recording the score here, today. It is not retaining all that valuable historic score data. So what you do, and what your database shows, are two different things.

Time to redesign the database, anyone?

Drawing Pictures

And what about the power of images – the images of Dimensions? Factary has recently learned the power of images in prospect research. Last year we moved from describing the people known to a prospect (her relationships) in words, to mapping these relationships as a diagram. Showing them as a visual, colourful map has totally changed the way we analyse and ‘read’ relationship’s information, helping clients to see the strategic potential in relationships. (See Factary Atom for more.)

Could we do the same with these many prospect Dimensions? Imagine a 3D map, over time, of one prospect’s Dimensions, showing Motivation soaring up when Trust grows, and showing, graphically the tragic impact on Objections when Participation drops. The map would highlight future dangers so that we could prevent them in time. Each prospect and donor would have their own map, and its shape would likely be characteristic of that donor (the sort of stuff we know now as ‘… she likes to be invited to events but doesn’t want to sit on a committee…’) Repeat the shape in the next cultivation, and you’ll get the same level of success.

Real life is messy

Dimensions, allowing us to record over time the many factors that lead to a person’s decision to donate, would allow us to craft a truly memorable customer experiences for our donors. And they would bring our systems in line with what is actually happening in messy, complicated real life.

Don’t get me wrong. The Prospect Value Chain has many, many advantages and I use it all the time. But it will not be around forever – maybe now is time for new thinking.

Factary Phi – our online, searchable database of philanthropists in the UK – has now reached 287,472 records and a total of £17 billion in recorded donations.

(*For comparison, £17 billion is more than the total budget for NASA for 2012, US$18 billion [source: www.whitehouse.gov])

Every single record is searchable, and subscribers can see who has given, to whom, and find the original public-domain source we used to find the record.

We’ve just uploaded over 23,000 new records to Factary Phi with a total value of £482m, equivalent to over half the total value of the Factary Phi database when it was launched in 2009. At the top end of philanthropy, we are currently reporting on 829 donations of £1m or more. That’s a lot of giving to UK organisations by people, trusts and foundations, and companies.

Factary Phi is a unique tool, which has been a great starting point for much of my research & certainly saved me a great deal of time. As a new product to the market, it can only become stronger as more and more data is added.
— Arts organisation

Factary Phi is a great resource which helps our team get the fullest view of philanthropists’ giving, and helps us in prospecting.
— Social welfare organisation

Factary Phi makes my job easier and is a much quicker way of searching on a donor’s philanthropy.
— Arts organisation

Phi has been very useful and I now use it on a weekly basis.
— University

Education organisations are winning more than 100 times as much funding from grant-making trusts than animal welfare organisations. Average grants to education are almost three times bigger than those to animal welfare.

Why are there these differences between sectors? How are other sectors faring?

Factary Phi reports on £2.5 billion in donations by 6,400 grant-making trusts, and names the source, recipient and amount for up to 40% of ALL grants made in some non-profit sectors – so it gives a useful picture of what is going on in grant-making.

Arts and Culture organisations are doing well from grant-making trusts at the low mid-range – from £10,000-£49,999. Here the sector is reporting more grants than any other. At the top of the range, education and health sectors are reporting more grants than anyone else at the £100,000-£499,999 range.

The UK’s venture philanthropy industry, now nine years old, is worth more than £1.5 billion and provides more than £50 million in support for nonprofits, according to a report issued today by Factary.

But who are the people behind this new wave in philanthropy?

Factary’s report, ‘The Venture Philanthropists – A Review of Venture Philanthropy funds in the UK and the people behind them,’ focuses on the 135 trustees, donors, patrons and board members in the UK VP sector, including brief biographies on each. Over half of the trustees come from the financial sector – with 29% coming from the private equity industry, a key target audience for many nonprofits. Many are wealthy – we identify more than £5.2 billion in personal wealth in the report.

Factary’s team has analysed the UK venture philanthropy sector, identifying the eleven key funds, reviewing their areas of interest, their finances and the people involved. We review the spectacular growth in investment income in the sector and look in detail at the £51.8m in charitable grants, loans and investments made by the sector.

The report – 70 pages of newly researched information – includes a detailed index of corporate and trust connections. The report details the trends in the sector, as well as giving background on venture philanthropy – history, definition and key features. Download a contents list here.

How to Order

To order a report email research@factary.com with your contact details. The report is available at £125 per copy.